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2013 News

Results of Scheme Meeting

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM AUSTRALIA, NEW ZEALAND, SOUTH AFRICA, JAPAN, CANADA OR SWITZERLAND OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

The Co-operative Group and The Co-operative Bank Liability Management Exercise – Announcement of approval of the Scheme by the holders of Dated Notes

Scheme approved by the holders of the Dated Notes at the Scheme Meeting held on 16 December 2013

A total of 625 Scheme Creditors voted, representing approximately 97.63% of the aggregate amount of Scheme Claims across all of the Dated Notes. 617 of those Scheme Creditors voted in favour, representing approximately 99.87% of the votes cast

Successful completion of the Liability Management Exercise now only dependent upon the Scheme being sanctioned by the Court at the hearing scheduled for 18 December 2013 and becoming unconditional in accordance with its terms

On 4 November 2013, Co-operative Group Limited ("TheCo-operative Group” or the “Group”) and The Co-operative Bank p.l.c. (“TheCo-operative Bank” or the “Bank”) announced their revised Recapitalisation Plan for The Co-operative Bank, including the liability management exercise to be concluded this year (the “ Liability Management Exercise”).

The Liability Management Exercise includes a scheme of arrangement (the “Scheme”) in respect of the following securities issued by The Co-operative Bank (together, the “Dated Notes”):

Description of the Securities

ISIN

Outstanding Principal Amount

Floating Rate Callable Step-up Dated Subordinated Notes due 2016

XS0254625998

€34,980,000

5.875% Subordinated Callable Notes due 2019

XS0189539942

£37,775,000

9.25% Subordinated Notes due 28 April 2021

XS0620315902

£275,000,000

Fixed/Floating Rate Subordinated Notes due November 2021

XS0274155984

£8,747,000

7.875% Subordinated Notes due 19 December 2022

XS0864253868

£235,402,000

5.75% Dated Callable Step-up Subordinated Notes due 2024

XS0188218183

£200,000,000

5.875% Subordinated Notes due 2033

XS0145065602

£150,000,000

At a meeting held yesterday, the holders of the Dated Notes approved the Scheme. A total of 625 Scheme Creditors voted, representing approximately 97.63 per cent. of the aggregate amount of Scheme Claims across all of the Dated Notes. 617 of those Scheme Creditors voted in favour, representing approximately 99.87 per cent. of the votes cast. Accordingly, the Scheme was approved by more than a majority in number representing at least 75 per cent. in value of Scheme Claims of those Scheme Creditors present and voting at the Scheme Meeting either in person or by proxy.

The Co-operative Bank further confirms that (i) bids to participate in the Additional New Ordinary Shares Offer exceeded in aggregate the number of Additional New Ordinary Shares to be issued pursuant to the Additional New Ordinary Shares Offer; (ii) the Additional New Ordinary Shares Offer did not have more than 1,249 investors subscribing for the minimum election amount; and (iii) the Sub-purchasing arrangements were not over-subscribed.

Successful completion of the Liability Management Exercise is now conditional only upon the Scheme being sanctioned by the Court in its discretion and becoming effective and unconditional in accordance with its terms (including that the aggregate subscription price of £125,000,002.50 for the Additional New Ordinary Shares Offer must be fully funded by the relevant investors prior to settlement). The Court hearing for sanctioning the Scheme is scheduled for 18 December 2013. Sanction of the Scheme on 18 December 2013 should enable The Co-operative Group and The Co-operative Bank to successfully complete the Liability Management Exercise on 20 December 2013.

The Co-operative Group and The Co-operative Bank expect to provide a further update on the Scheme on or shortly after 18 December 2013.

Capitalised terms used and not otherwise defined in this announcement have the meanings given in the Explanatory Statement relating to the Scheme.

Neither this announcement, the publication in which it is contained nor any copy of it may be taken, transmitted or distributed, directly or indirectly, into Australia, New Zealand, South Africa, Japan, Canada or Switzerland or any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. Any failure to comply with this restriction may constitute a violation of securities law in those jurisdictions. The distribution of this document in other jurisdictions may also be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The availability of the transactions described herein and the distribution of this announcement in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

In particular, this announcement does not constitute an offer for sale of, or a solicitation to purchase or subscribe for, any securities in the United States. No securities of the Group or the Bank have been, or will be, registered under the US Securities Act of 1933, as amended (the " Securities Act"), and securities of the Group or the Bank may not be offered or sold in the United States absent an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Group and the Bank securities are being offered by means of a prospectus or Scheme document that may be obtained from the Bank and/or the Group, as applicable.

This announcement is an advertisement and not a prospectus. Investors should not make any investment decision regarding any securities referred to in this announcement or in the Liability Management Exercise except on the basis of information contained in the prospectuses (as supplemented) and Consent and Exchange Offer Memorandum published by the Group and the Bank and the Scheme documents made available by the Bank. The Group and the Bank expressly reserve the right to adjust or amend the terms of the Liability Management Exercise and the securities.

HSBC Bank plc (“HSBC”) has been appointed as a dealer manager by the Bank and the Group to facilitate the LME and as adviser to the Bank in connection with the LME. HSBC is authorised and regulated by the PRA and the FCA and is acting exclusively for the Bank (in its capacity as a dealer manager and adviser) and the Group (in its capacity as a dealer manager) in connection with the LME and will not regard any other person (whether or not a recipient of this announcement or a holder of the Bank’s securities) as a client in relation to the LME and will not be responsible to anyone other than the Bank and the Group for providing the protections afforded to its clients or for providing advice in relation to the LME or any other matter referred to in this announcement.

UBS Limited (“UBS”) has been appointed as a dealer manager by the Bank and the Group to facilitate the LME and as adviser to the Group in connection with the LME. UBS is authorised and regulated by the PRA and the FCA and is acting exclusively for the Bank (in its capacity as a dealer manager) and the Group (in its capacity as a dealer manager and adviser) in connection with the LME and will not regard any other person (whether or not a recipient of this announcement or a holder of the Bank’s securities) as a client in relation to the LME and will not be responsible to anyone other than the Bank and the Group for providing the protections afforded to its clients or for providing advice in relation to the LME or any other matter referred to in this announcement.

This announcement has been issued by and is the sole responsibility of the Bank and the Group. Neither HSBC nor UBS accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this announcement or for any other statement made or purported to be made by it, or on its behalf, in connection with the Bank, the Group or the LME and nothing in this announcement may be relied upon as a promise or representation in this respect, whether or not in the past or future. Subject to applicable law, each of HSBC and UBS accordingly disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise, which it might otherwise have in respect of this announcement or any such statement.

The Co‑operative Bank p.l.c. is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (No. 121885). The Co‑operative Bank, Platform, smile and Britannia are trading names of The Co‑operative Bank p.l.c., P.O. Box 101, 1 Balloon Street, Manchester M60 4EP. Registered in England and Wales No.990937. Credit facilities are provided by The Co‑operative Bank p.l.c. and are subject to status and our lending policy. The Bank reserves the right to decline any application for an account or credit facility. The Co‑operative Bank p.l.c. subscribes to the Standards of Lending Practice which are monitored by the Lending Standards Board.